What College Freshmen Need to Know About Their Student Loans
Your student loans may be the last thing on your mind when you have your classes, you rush with the student body and this guy down the hallway to find out, but there are a few things you must do now that will keep you ahead of everyone else. high school graduation.
It’s orientation week for freshmen at Lifehacker! This week, we’ll share how to break out of the summer fog and plunge into the autumn burst of activity, whether you’re heading to campus for the first time, getting your kids ready for school, or looking for ways to simply be more productive in school. So buckle up your Guardian Hunters with Velcro, apprentices. The class is now in session.
Try to pay only interest payments while you are in school
If you have federal loans, you usually have a six month grace period after graduation before you start paying them back. The reason is how long it will take you to find a job and get comfortable with your new life. But if you manage to start making payments while you’re still in school, you can save tons of money in the long run.
This is especially true of unsubsidized loans , which carry interest while you are in school. The interest on these loans is capitalized, which means that it is added to the total balance of the loan. Then the next month you pay interest on that large amount. And from there the snowball begins.
So if you can, try paying interest while you are in school. You can set up automatic payments on your student loan website (check your loan statement if you don’t know who your service staff is – it’s probably a company like Great Lakes, MOHELA, Navient, or Nelnet ) to cover though would that, and then you don’t have to worry about your balance rising dramatically while you’re in school.
Next year you will have to complete the FAFSA again
Most relief offices require you to complete the FAFSA every year , so set a calendar reminder to view it in the spring. You don’t want to lose sight of any potential help.
Don’t count on forgiveness
Many more people believe that their loans can one day be forgiven than is statistically possible. If you are counting on a government service loan forgiveness, be aware that the requirements are very strict. Other options for forgiveness will take decades. And if you do take the path of forgiveness, know that the tax bill at the end can be frustrating.
It is much more likely that you will have to pay off all of your debt. So, you’ll want to explore your repayment options, set a realistic budget, and come up with a plan that works for you.
And know the difference: Forgiveness only applies to federal loans. If you have private loans (or after you consolidate your federal loan with a private lender), you have no chance of forgiveness.
Don’t take mom and dad at their word
Mom and Dad may have helped you fill out the FAFSA and loan information this year, but don’t just refuse to do what they say.
No doubt your parents are wonderful and smart, but that doesn’t mean they understand the intricacies of student loans, because even the “experts” are wrong. (In fact, your school may not even provide you with the “best” loan answers .) Take some time to research the question yourself.
Beware of Fraud
Student loans are worth billions and billions of dollars, which means they are a prime breeding ground for scammers. Some will offer to “help” you pay off loans faster, while others will offer questionable refinancing options. Ignore them .
First of all, never tell anyone your ID Federal Student Aid. With it, fraudsters can gain access to all of your personal information, which will cost you much more than paying a student loan.